eMagin corporation - Page 18

eMagin has issued financial results for its fiscal year and fourth quarter ending December 31, 2006. The results show record revenues with year-over-year revenues improving by 118%.

Financial Summary:

• Revenue for the three and twelve months ending December 31, 2006, of $2.6 million and $8.2 million increased 101% and 118% respectively from 1.3 million and $3.7 million for the quarter and year ending December 31, 2005. The growth in revenue was directly attributable to increases in microdisplay demand with military OEM growth of 239% driving results.
• Cost of goods declined 24% to $2.4 million for the quarter ended December 31, 2006 from $3.2 in 2005. For the full year cost of goods were $11.4 million in 2006 as compared to $10.2 million in 2005. Gross margins turned positive in the fourth quarter at $138,000 compared to a gross loss of $1.9 million in the fourth quarter of 2005. For the full year ended December 31, 2006 gross loss was $3.2 million compared to a gross loss of $6.5 million in 2005.
• Net loss declined 69% for the three months ending December 31, 2006, to $1.5 million from $4.8 million in 2005. For the full year 2006’s net loss was $15.3 million compared to a net loss of $16.5 million during 2005. 2006 included approximately $2.9 million of expenses associated with expensing of stock options. Options were not expensed in 2005. Loss per share for the three and 12 months ending December 31, 2006, were $(0.15) and $(1.52) compared to the same periods ending December 30, 2005, of $(0.51) and $(1.94) per share

eMagin's founder, Gary Jones, is leaving his roles of CEO and president, which he has held with the Company for over 15 years, but will continue to serve the Company as a consultant focused on current strategic partnerships and M&A opportunities. Dr. K.C. Park, executive vice president, has been appointed as interim CEO and president.

"We believe that the timing for this transition is good," Jones commented. "We've just delivered our highest revenue quarter and year. Preliminary results for the fourth quarter of 2006 show revenues of $2.6 million, up over 100% from $1.3 million in 2005. Preliminary full-year revenue for 2006 of $8.2 million reflects growth of 118% from $3.7 million in 2005. In addition, we anticipate this growth to continue through the first quarter of 2007 with early projections calling for over $3.5 million in revenue." He went on to note that eMagin's cash position has improved during the past quarter owing to customer prepayments, increased sales and short-term investments with $1.7 million in cash on December 31, 2006, but cash remains a significant risk factor for the company and shareholders.

Chatten Associates reports a new application for eMagin’s Z800 3DVisor. The Pennsylvania-based hardware developer has turned the popular gaming device into a controller for remotely driven vehicles.

We simply modified the 3DVisor to fit on a soldier's night vision helmet mount, noted John Chatten, CEO and president, Chatten Associates. Soldiers responsible for disposing of explosive ordnance use it as part of a head-aimed vision system to look for road-side bombs. Wherever the soldier looks, the sensor gimbal-mounted on the vehicle looks (courtesy of the Z800's motion detectors). For soldiers wearing the system, it's like being out there, except they don't get hurt if the bomb goes off."

Press release by eMagin - Sensor Technology Systems, Inc., has selected Tek Gear’s eMagin-based (AMEX:EMA) O2 microdisplay OEM kit for their new Enhanced Heads-Up Display (E-HUD) module for the AN/PVS-21 Low Profile Night Vision Goggle. The O2 OEM Kit is a drop in module that makes it easy to integrate high resolution microdisplays into new and existing designs. The O2 Kit includes eMagin’s new SVGA+ OLED-XL microdisplays and Tek Gear’s high performance controller.

Alan Page, General Manager, STS said - The OLED-XL provides the sharpest, brightest and most vibrant image we have seen on a microdisplay.

Tek Gear originally designed, tested and delivered the O2 kit with eMagin’s color SVGA+ OLED microdisplay. According to Tony Havelka, President, Tek Gear, When we did our tests with the new color OLED-XL we were amazed that we could obtain an incredibly bright image (>300 cd/m2) at less than 900mW for the entire system at its highest luminance setting.

Ron Mertens from OLED-Info.com recently had the opportunity to interview Ian Underwood, Strategic Marketing Officer and Co-Founder of MicroEmissive Display (MED). Ian is also the co-inventor of its PLED (also called P-OLED) microdisplay technology. Prior to 1999 he was at The University of Edinburgh where he carried out pioneering research and development in the field of liquid crystal microdisplays between 1983 and 1999. Ian has recently co-authored a book about microdisplays.

MicroEmissive Displays (MED) was founded in 1999 with the aim of developing and commercialising a new microdisplay technology using PLED materials. MED is a public company listed on the Alternative Investment Market of the London Stock Exchange. In september 2006 MED has announced that it has raised over $9 million, and has revealed its plans for a volume manufacturing facility for its polymer light emitting diode (PLED) microdisplay products.

Ron Mertens from OLED-Info.com recently had the opportunity to interview Susan Jones, eMagin's Executive Vice President and Chief Marketing Officer.

eMagin is engaged in the design, development, manufacturing and marketing of virtual imaging products that utilize OLEDs, OLED-on-silicon micro displays and information technology solutions. Focused on Micro displays, eMagin is selling its micro displays to companies that incorporate them into products such as cameras, army helmets or headsets, etc.

Q: First of all, thank you for accepting to do this interview session with us... Let's begin. What kind of OLED microdisplays are you currently selling?

eMagin is currently selling SVGA+ OLED and OLED-XL microdisplays that have 852x600 color triad pixels, SVGA 3D OLED and OLED-XL microdisplays that have 800x600 color triad pixels. We also just announced the availability of a limited number of interface design and reference kits with prototypes of our new SVGA 3DS OLED-XL microdisplay that is the same resolution as the SVGA-3D, but with a much smaller diagonal.

During the period, year over year revenue increases continued at over 100% for the third quarter in a row and sequentially grew 37% from second quarter levels. Commenting on the results, Gary Jones, eMagin’s CEO and president, said, As you can see our financial performance is improving. Costs are down and third quarter revenue of $2.3 million is a substantial increase over the same period last year, providing continued proof of traction in our key markets. The recent placements of our microdisplays by OEMs in major systems such as Sagem's FELIN system in European military programs and Nivisys' TAM-14 being deployed by the U.S. Department of Homeland Security indicate a strong future for the Company's OLED technology.

eMagin Corporation will begin shipping pre-production version samples of the world’s smallest pixel-pitch display. The SVGA-3DS will be available in limited quantities with a custom interface design & reference kit (IDRK) in December.

Employing the company’s OLED-XL™ technology, the SVGA-3DS microdisplay offers both analog and digital signal processing in a compact (0.44-inch) display with both analog and digital interface capability imbedded, making it an even more affordable, easy-to-integrate solution for many virtual imaging systems.

The new SVGA-3DS microdisplays eliminate the need for extra circuitry and components while allowing for a smaller display module design with increased functionality. Specific improvements include improved pixel uniformity, extremely high contrast (measured in the lab at 10,000:1), improved color gamut, on-chip temperature sensor, and luminance compensation over the entire mil spec range, while retaining the high energy efficiency and high video speed characteristics of eMagin’s approx. 0.6-inch diagonal OLED microdisplays.

For more info, see the attached release (PDF) 

eMagin had their annual shareholder meeting on the 20th of October. The reverse stock split was approved, and updates were given:

• eMagin OLED microdisplays are placed in major systems (such as the Sagem FELIN system), and they believe that the future of this business section will be good.
• 3DVisor sales are improving. They are going to focus on partnerships and agreements, not on direct sale to consumers.
• Financials are improving, too. Costs are down, and revenues are increasing. We'll hear more in the earnings statement.
• The most important statement was probably this: "the Company has received several inquiries from various strategic relationships ranging from investment to acquisition and that the firm has retained CIBC World Markets Corporation and Larkspur Capital Corporation to assist the company in investigating these and other strategic alternatives."

The FY 2007 Department of Defense Appropriations Bill includes two priority projects sought by eMagin Corporation and the U.S. Army. eMagin will conduct two technology development efforts to support projected military needs. The first aims to improve the power-efficiency of OLED microdisplays for U.S. Army thermal imaging applications; the second will result in a very high-resolution, HD-compatible display for U.S. Army medical applications.

The bill has budgeted $2.75 million to support the two projects for fiscal year 2007. The projects will involve design and engineering resources in both New York and Washington.